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Household Credit Services v. Pfennig

Docket No.: 02-857
Certiorari Granted: Jun 27 2003
Argued: February 23, 2004
Decided: April 21, 2004

Topics:

Truth in Lending, Economic Activity, Civil Procedure, Equal Access to Justice, Federal Rules of Civil Procedure, Natural Resources, Truth in Lending, sovereign immunity

PartyNames: Household Credit Services, Inc. and MBNA America Bank, N.A. v. Sharon R. Pfennig
Petitioner: Household Credit Services, Inc. and MBNA America Bank, N.A.
Respondent: Sharon R. Pfennig

Court Below: United States Court of Appeals for the Sixth Circuit
Citation: CA 6, 295 F.3d 522. Question Presented In enacting the Truth in Lending Act, Congress delegated expansive authorityto the Federal Reserve Board to issue implementing regulations. The Act provides that "these regulations may contain such classifications...as in thejudgment of the Board are necessary" to effectuate the purposes of the statute. 15 U.S.C. § 1604(a). The Federal Reserve exercised this authority by promulgating Regulation Z, a provision of which has since 1981 excluded from the definition of "finance char ge" any fees imposed "for exceeding acredit limit." 12 C.F.R. §226.4(c)(2). In Ford Motor Credit Co. v. Milhollin ,
Supreme Court Docket

Household Credit Services, Inc. and MBNA America Bank, N.A.
v.
Sharon R. Pfennig
541 U.S. 232 (2004)
Question:

Was the Federal Reserve Board's exclusion of over-limit fees from the definition of "finance charges" a reasonable interpretation of the Truth in Lending Act?

Note:

. CA 6, 295 F.3d 522. Question Presented In enacting the Truth in Lending Act, Congress delegated expansive authorityto the Federal Reserve Board to issue implementing regulations. The Act provides that "these regulations may contain such classifications...as in thejudgment of the Board are necessary" to effectuate the purposes of the statute. 15 U.S.C. § 1604(a). The Federal Reserve exercised this authority by promulgating Regulation Z, a provision of which has since 1981 excluded from the definition of "finance char ge" any fees imposed "for exceeding acredit limit." 12 C.F.R. §226.4(c)(2). In Ford Motor Credit Co. v. Milhollin , 444 U.S. 555, 565 (1980), this Court held that the Federal Reserve's interpretations of the Truth in Lending Act are dispositive unless"demonstrably irrational." A divided pa nel of the Sixth Circuit nevertheless invalidated the Federal Reserve's classification of over-limit fees, holding thatRegulation Z's exclusion of such fees from the finance charge conflicts with the Act's general definition of "finance charge." The question presented for review is: Whether the Sixth Circuit improperly su bstituted its interpretation of theTruth in Lending Act for that of the Federal Reserve - the agency authorized by Congress to interpret the statute - in invalidating an important provisionof Regulation Z that affects tens of millions of consumer credit card agreements. CERT. GRANTED: 6/27/03

Household Credit Services v. Pfennig
ORAL ARGUMENT

February 23, 2004

Holding: reversed
Decision: Decision: 9 votes for Household Credit Services, 0 vote(s) against
Vote: 9-0
Opinion By: Justice Clarence Thomas

Household Credit Services v. Pfennig
Case Documents

1Opinion in Household Credit Services v. Pfennig
2Opinion in Household Credit Services v. Pfennig
3Slip Opinion in Household Credit Services v. Pfennig
Additional documents for this case are pending review.